Editor's Note:

We want to take some money off the table in our COST trade before earnings this week.

-James


Closed Plays


AKS, ATI, and DOW have been closed.


Play Updates


Boeing Co. - BA - close: 77.52

05/21 update: BA found support near $76 last week. The stock is trying to bounce but prior support near $78 is acting as resistance. If the market continues to slip we can expect BA to pull back toward more significant support in the $75-74 area. I'd wait for a bounce near $75 before considering new bullish positions.

- Current Positions -
Apr 27, 2011 - entry price on BA @ 76.50, option @ 4.50
symbol: BA1221A80 2012 JAN $80 call - current bid/ask $ 5.10/ 5.20

Apr 27, 2011 - entry price on BA @ 76.50, option @ 4.95
symbol: BA1319A90 2013 JAN $90 call - current bid/ask $ 5.15/ 5.35

05/14/11 New stop loss @ 73.90
04/27/11 Play opened. Small positions.

Current Target: $89.00, and $104.00
Current Stop loss: 73.90
Play Entered on: 04/27/11

Originally listed on the Watch List: 03/26/11


BE Aerospace Inc. - BEAV - close: 37.36

05/21 update: We were fortunate that BEAV found support at its 50-dma again. BEAV is currently consolidating sideways with a neutral trend of higher lows and lower highs. As this coil narrows we can expect a breakout one way or the other soon. Traditionally I'd expect a breakout in the prevailing trend, which for BEAV the long-term trend is still higher. However, the recent weakness in the stock market's major indices could weigh on BEAV's performance and produce a breakdown.

I am not suggesting new positions at this time. More conservative traders may want to up their stop toward the $35.50 area or the 50-dma.

- Current Positions -
Feb 23, 2011 - entry price on BEAV @ 34.00, option @ 2.75
symbol: BEAV1116G35 2011 JUL $35 call - current bid/ask $ 3.20/ 3.50

05/14/11 Sell at least half now. Bid @ $3.60 (+30.9)
05/14/11 Adjusted upside target to $42.50
05/14/11 New stop loss @ 34.75
04/30/11 New stop loss @ 33.95
04/09/11 New stop loss @ 32.95
04/02/11 New stop loss @ 31.95

Current Target: $42.50
Current Stop loss: 34.75
Play Entered on: 02/23/11
Originally listed on the Watch List: 01/22/11


Bristol-Myers Squibb Company - BMY - close: 28.37

05/21 update: After weeks of gains BMY is finally seeing some profit taking. Shares should see some support near $28.00. If that level fails then the 50-dma near $27.50 and the 200-dma near $26.65 should offer additional support. I am not suggesting new positions at this time. We'll wait to see where BMY bounces before considering new positions.

Our long-term target is $32.00. Investors might want to consider turning this trade into a calendar spread or vertical spread to maximize its potential.

- Suggested Positions -
Mar 14, 2011 - entry price on BMY @ 26.14, option @ 1.13
symbol: BMY1221A27.5 2012 JAN $27.50 call - current bid/ask $ 1.94/ 1.99

- or -

Mar 14, 2011 - entry price on BMY @ 26.14, option @ 1.63
symbol: BMY1319A27.5 2013 JAN $27.50 call - current bid/ask $ 2.65/ 2.72

Current Target: $32.00
Current Stop loss: 24.95
Play Entered on: 03/14/11
Originally listed in the New Plays 03/12/11


CACI International - CACI - close: 62.32

05/21 update: Shares of CACI are still holding up reasonably well. Traders bought the dip near $61 last week. CACI still has a bullish trend of higher lows. If CACI corrects and follow the market lower we can look for potential support near its 50-dma, near $60.00 and then near its 100-dma. I am not suggesting new bullish positions at this time. Our stop is currently under the 100-dma.

Earlier Comments:
I do consider this a more aggressive trade and if we keep our position size small we can limit our risk. Our first upside target is $69.00. CACI doesn't have LEAPS so we'll have to use the 2011 September calls.

- Current (small) Positions -
Apr 4, 2011 - entry price on CACI @ 62.04, option @ 3.30
symbol: CACI1117I65 2011 SEP $65 call - current bid/ask $ 2.25/ 2.55

05/07/11 New stop loss @ 57.75

Current Target: $69.00
Current Stop loss: 57.75
Play Entered on: 04/04/11
Originally listed on the Watch List: 02/12/11


Canadian Natl. Railway Co. - CNI - close: 77.02

05/21 update: CNI delivered a gain for the week. Shares bounced from technical support at their 50-dma. The weekly chart has produced a bullish engulfing candlestick pattern. Unfortunately the bounce has not yet cleared the short-term trend of lower highs. You could argue that CNI is forming a bull-flag pattern. With the stock market looking fragile here I wouldn't be surprised to see another dip near the 50-dma again. The 100-dma has risen to the $72 level. I am raising our stop loss to $71.75. I am not suggesting new positions at this time.

- Current Positions -
Feb 28, 2011 - entry price on CNI @ 72.39, option @ 2.90
symbol: CNI1221A80 2012 JAN $80 call - current bid/ask $ 3.60/ 3.80

05/21/11 new stop loss @ 71.75
05/05/11 new entry point @ 75.00
04/02/11 New stop loss @ 69.00

Current Target: $89.00
Current Stop loss: 71.75
Play Entered on: 02/28/11
Originally listed in the New Plays 02/26/11


Costco Wholesale - COST - close: 83.40

05/21 update: Take Profits Now! COST has been showing relative strength and managed to post another gain for the week in spite of the market's weakness. The stock remains very overbought with its sharp rally from its March lows. Earnings are coming up on May 25th. What are the odds that investors decide to sell the news and lock in profits no matter what the results are?

I am suggesting we sell at least half of our position now. Plus, more conservative traders may want to raise their stop loss closer to the $79-80 area. I am not suggesting new positions now. I am expecting some profit taking following the earnings announcement.

- Current Positions -
Apr 7, 2011 - entry price on COST @ 76.37, option @ 3.80
symbol:COST1221A80 2012 JAN $80 call - current bid/ask $ 7.55/ 7.65

- or -

Apr 7, 2011 - entry price on COST @ 76.37, option @ 5.05
symbol:COST1319A85 2013 JAN $85 call - current bid/ask $ 8.30/ 8.55

05/21/11 Take Profits - Sell Half now! COST @ 83.40.
2012 $80 call @ $7.55 (+98.6%), 2013 $85 call @ $8.30 (+64.3%)
05/14/11 New stop loss @ 75.75
04/30/11 New stop loss @ 73.40

Chart of COST:

Current Target: $89.50, 99.00
Current Stop loss: 75.75
Play Entered on: 04/07/11
Originally listed on the Watch List: 01/29/11


Walt Disney Co. - DIS - close: 41.50

05/21 update: DIS spent last week consolidating sideways after the earnings-induced sell-off the week before. The stock has a $44-40 trading range but I am not interesting in buying calls now with the stock market's major averages looking vulnerable to more selling pressure. I am not suggesting new positions at this time.

- Current Positions -
Oct 27, 2010 - entry price on DIS @ 35.60, option @ 2.23
symbol: DIS1221A40 2012 JAN $40 call - current bid/ask $ 4.00/ 4.10

- or -

Oct 27, 2010 - entry price on DIS @ 35.60, option @ 3.63
symbol: DIS1319A40 2013 JAN $40 call - current bid/ask $ 6.10/ 6.20

02/12/11 New stop loss @ 37.85
02/09/11 1st Target Hit. Options @ +137% and +103%
02/05/11 New stop loss @ 35.75
01/08/11 New stop loss @ 34.95
01/08/11 Target changed to $43.00 and $46.00
10/27/10 Play opened, DIS opened @ $35.60

Current Target(s): $43.00, 49.00
Current Stop loss: 37.85
Play Entered on: 10/27/10
Originally listed on the Watch List 10/24/10


Dr. Pepper Snapple Group, Inc. - DPS - close: 42.10

05/21 update: DPS managed to eke out another gain for the week but upward momentum seems to be stalling a bit. This past week saw DPS raise its quarterly cash dividend +28% to 32 cents a share. I would wait for a dip near $40.00 before considering new bullish positions. Currently our exit target is $46.00. DPS does not have LEAPS so we'll have to use the November 2011 calls.

- Current Positions -
May 11, 2011 - entry price on DPS @ 40.55, option @ 2.85
symbol: DPS1119K40 2011 NOV $40 call - current bid/ask $ 3.50/ 3.90

- or -

May 11, 2011 - entry price on DPS @ 40.55, option @ 1.00
symbol: DPS1119K45 2011 NOV $45 call - current bid/ask $ 1.30/ 1.55

Current Target: $46.00
Current Stop loss: 37.95
Play Entered on: 05/11/11
Originally listed on the Watch List: 05/07/11


Darden Restaurants - DRI - close: $51.52

05/21 update: The rally in restaurant stocks continues. DRI has broken out to new all-time highs. Shares met our condition to launch positions on Thursday. We wanted to see DRI close above the $51.00 level. Shares did so with a big surge higher on Friday to close near $52.00. I would still consider new positions now but there is a good chance we'll get a better entry point on a dip into the $51-50 zone soon.

Now that our play is open our stop loss is at $47.40. Our long-term targets are $59.50 and $64.75.

- Current Positions -
May 19, 2011 - entry price on DRI @ 52.03, option @ 2.74
symbol: DRI1221A55 2012 JAN $55 call - current bid/ask $ 2.50/ 2.70

- or -

May 19, 2011 - entry price on DRI @ 52.03, option @ 5.50
symbol: DRI1319A55 2013 JAN $55 call - current bid/ask $ 4.90/ 5.40

Chart of DRI:

Current Target: $59.50, 64.75
Current Stop loss: 47.40
Play Entered on: 05/19/11
Originally listed on the Watch List: 05/14/11


Brinker International - EAT - close: 25.76

05/21 update: EAT is another restaurant stock that is performing well. Shares hit new three-year highs on Thursday. If the stock market didn't look so vulnerable right now I would consider new bullish positions in EAT. Unfortunately the market looks poised for more selling - at least on a short-term basis. I am not suggesting new positions at this time.

- Current Positions -
Feb 23, 2011 - entry price on EAT @ 22.50, option @ $ 1.10
symbol: EAT1116G25 2011 JUL $25 call - current bid/ask $ 1.45/ 1.75

04/02/11 New stop @ 22.90
03/26/11 New stop @ $21.95

Current Target: $29.50
Current Stop loss: 22.90
Play Entered on: 02/23/11
Originally listed on the Watch List: 02/12/11


Ford Motor Co - F - close: 15.00

05/21 update: Ford has been going nowhere for the past three weeks now. You could argue Ford is merely churning sideways near support at $15.00 and technical support at its 50 and 200-dma. However, if you look close enough Ford has a bearish trend of lower highs and lower lows over the last three weeks. I am concerned that if the market accelerates lower Ford will break key support in the $15 area. If this happens I would bet on a test of the March lows near $13.75. Please note that I am raising our stop loss to $13.49. More conservative traders may want to up their stop loss toward the $14.50 area instead. I am not suggesting new bullish positions at this time.

- Suggested Positions -
Feb 28, 2011 - entry price on F @ 15.29, option @ 2.17
symbol: F1221A15 2012 JAN $15 call - current bid/ask $ 1.47/ 1.50

- or -

Feb 28, 2011 - entry price on F @ 15.29, option @ 1.50
symbol: F1319A20 2013 JAN $20 call - current bid/ask $ 0.94/ 1.00

- Second Position, listed May 7th, 2011 -

May 9, 2011 - entry price on F @ 15.12, option @ 1.71
symbol: F1221A15 2012 JAN $15 call - current bid/ask $ 1.47/ 1.50

- or -

May 9, 2011 - entry price on F @ 15.12, option @ 1.09
symbol: F1319A20 2013 JAN $20 call - current bid/ask $ 0.94/ 1.00

05/21/11 New stop loss @ 13.49
05/07/11 New entry point on bounce from $15.00
03/26/11 New stop loss @ $12.95

Current Target: $19.75, and $24.00
Current Stop loss: 13.49
Play Entered on: 02/28/11
Originally listed in the New Plays 02/26/11


Fiserv, Inc. - FISV - close: 63.10

05/21 update: FISV displayed some strength last week and broke out higher from its sideways consolidation. This is encouraging but given the market's recent weakness I would not launch new positions at this time. FYI: More conservative traders may want to raise their stops closer to the $60.00 level.

- Suggested Positions -
Feb 14, 2011 - entry price on FISV @ 62.30, option @ 3.20
symbol: FISV1117I65 2011 SEP $65 call - current bid/ask $ 2.05/ 2.25

Current Target: $74.75
Current Stop loss: 57.50
Play Entered on: 02/14/11
Originally listed on the Watch List: 01/29/11
Originally listed in the New Plays 02/12/11


James River Coal Co. - JRCC - close: 21.06

05/21 update: The month of May has not been kind to coal stocks. On a positive note shares of JRCC seem like they might have found a bottom hear the 200-dma. Shares have been consolidating sideways the past several sessions. I remain very cautious here. The $20.00 level is key support and it's not that far away. We have a stop loss at $19.90. On a short-term basis the $22 area looks like resistance. I am not suggesting new positions at this time.

- Current Positions -
Apr 12, 2011 - entry price on JRCC @ 22.50, option @ 3.10
symbol: JRCC1221A25 2012 JAN $25 call - current bid/ask $ 1.85/ 2.15

- or -

Apr 12, 2011 - entry price on JRCC @ 22.50, option @ 4.70
symbol: JRCC1319A27 2013 JAN $27 call - current bid/ask $ 2.90/ 3.40

Current Target: $29.50
Current Stop loss: 19.90
Play Entered on: 04/12/11
Originally listed on the Watch List: 01/22/11


Monsanto Co. - MON - close: 66.33

05/21 update: Hmm.... it was an interesting week for MON. A week ago I wrote it was do or die for MON. Shares saw a dip toward $62 but it bounced intraday. On the 18th MON surged up and through its 200-dma and back above the $65.00 level. The oversold bounce did stall near its 50-dma but the action this past week has created hope the $62-63 area could be the support we were expecting. MON did break one trendline of lower highs but the intermediate trend is still a bearish one of lower highs and lower lows. I am not suggesting new bullish positions at this time.

Prior Comments:
Our plan was to keep our position size small to limit our risk since MON can be so volatile at times. Our long-term targets are the $85-90 zone.

- Current (SMALL) Positions -
Mar 15, 2011 - entry price on MON @ 65.50, option @ 6.75
symbol: MON1221A70 2012 JAN $70 call - current bid/ask $ 4.90/ 5.00

- or -

Mar 15, 2011 - entry price on MON @ 65.50, option @ 8.75
symbol: MON1319A75 2013 JAN $75 call - current bid/ask $ 6.55/ 7.00

04/09/11 New stop loss @ 61.75, Readers may want to exit early now.

Current Target(s): $85.00
Current Stop loss: 61.75
Play Entered on: 03/15/11
Originally listed on the Watch List: 01/08/11


PACCAR Inc. - PCAR - close: 50.55

05/21 update: PCAR has broken down under technical support at its 50-dma and 200-dma but it has managed to bounce near psychological support at the $50.00 level. Lack of follow through on the sell-off is encouraging but the short-term trend is still down. A close under $50 could signal a drop toward its March lows, which would stop us out and break the long-term up trend for PCAR. I am not suggesting new bullish positions at this time.

More conservative traders may want to raise their stop loss closer to the $49.00 levels.

FYI: If looks like PCAR must have had some sort of special dividend to create these odd strike prices. Instead of a normal $55.00 strike price PCAR has $54.70 strikes.

- Current (SMALL) Positions -
Mar 21, 2011 - entry price on PCAR @ 50.75, option @ 3.70
PCAR1221A54.7 2012 JAN $54.70 call - current bid/ask $ 2.95/ 3.10

- or -

Mar 21, 2011 - entry price on PCAR @ 50.75, option @ 8.00
PCAR1319A54.7 2013 JAN $54.70 call - current bid/ask $ 5.80/ 6.70

05/14/11 New stop loss @ 47.75

Current Target(s): $58.00, 64.00
Current Stop loss: 47.75
Play Entered on: 03/21/11
Originally listed on the Watch List: 03/19/11


Scotts Miracle Grow Co. - SMG - close: 57.48

05/21 update: SMG slipped to $56.17 at its lowest levels last week. I'm not convinced the correction is over and would still look for a dip toward support near $55 and its 100-dma.

Earlier Comments:
We want to keep our position size small to limit our risk. SMG doesn't have LEAPS so we'll have to buy September calls. Our target is the $65-70 zone.

- Current (SMALL) Positions -
Mar 25, 2011 - entry price on SMG @ 58.00, option @ 3.00
SMG1117I60 2011 SEP $60 call - current bid/ask $ 1.60/ 2.00

Current Target(s): $65.00-70.00
Current Stop loss: 53.75
Play Entered on: 03/25/11
Originally listed on the Watch List: 03/05/11


Southwestern Energy Co. - SWN - close: 42.87

05/21 update: SWN has been showing some relative strength. Investors have been buying dips near SWN's rising 50-dma. Technical signals are starting to turn bullish again. I am tempted to launch new positions here but I'm more concerned about another downturn for the market's major averages, which would probably weigh on SWN as well. More conservative traders might want to raise their stops closer to the $40 level.

Earlier comments:
We wanted to keep our position size small to limit our risk.

- Current (SMALL) Positions -
Apr 7, 2011 - entry price on SWN @ 40.50, option @ 2.90
SWN1221A45 2012 JAN $45 call - current bid/ask $ 3.50/ 3.60

- or -

Apr 7, 2011 - entry price on SWN @ 40.50, option @ 5.85
SWN1319A45 2013 JAN $45 call - current bid/ask $ 6.40/ 6.65

05/07/11 New stop loss @ 37.75

Current Target(s): $50.00-52.50
Current Stop loss: 37.75
Play Entered on: 04/07/11
Originally listed on the Watch List: 04/02/11


Union Pacific Corp. - UNP - close: 101.99

05/21 update: UNP posted a gain for the week but the action hasn't been very inspiring. The stock bounced from the $99 level but saw its rally reverse at resistance near $104. Odds are good UNP will see another dip into the $100-98 zone. I'm not suggesting new positions today. We'll wait and see where UNP bounces from next week.

- Current Positions -
May 5, 2011 - entry price on UNP @ 100.15, option @ 5.00
UNP1221A110 2012 JAN $110 call - current bid/ask $ 4.50/ 4.65

- or -

May 5, 2011 - entry price on UNP @ 100.15, option @ 6.00
UNP1319A120 2013 JAN $120 call - current bid/ask $ 5.95/ 6.75

Current Target(s): $119.75-134.00
Current Stop loss: 94.45
Play Entered on: 05/05/11
Originally listed on the Watch List: 04/30/11


CLOSED Plays


AK Steel Holding - AKS - close: 14.13

05/21 update: It was another choppy week for shares of AKS. The stock traded under support near $14.00 on May 17th. The oversold bounce has now failed at its 200-dma. Our stop loss was hit at $13.90 on May 17th.

Earlier comments:
AKS can be volatile so our plan was to limit our risk by keeping our position size small.

- Current Positions -
Feb 22, 2011 - entry price on AKS @ 16.10, option @ 1.55
symbol: AKS1221A20 2012 JAN $20 call - Stopped out: $0.45 (-70.9%)

- or -

Feb 22, 2011 - entry price on AKS @ 16.10, option @ 2.95
symbol: AKS1319A20 2013 JAN $20 call - Stopped out: $1.69 (-42.7%)

05/17/11 Stopped out @ 13.90. 2012 $20 call @ 0.45 (-70.9%), 2013 $20 call @ 1.69 (-42.7%)
05/14/11 AKS has confirmed its bearish breakdown. Readers will want to consider an early exit now!

Chart of AKS:

Current Target: $25.00
Current Stop loss: 13.90
Play Entered on: 02/22/11
Originally listed on the Watch List: 12/25/10


Allegheny Technology - ATI - close: 63.78

05/21 update: Ouch! It's been an ugly week for ATI. The stock is down about five points in the last few sessions. ATI has broken down through several layers of support. While we can certainly argue that ATI is oversold and due for a bounce the trend is down and volume has been rising on the decline. The $60.00 level should still offer some support. More aggressive traders may want to hang on and just move your stop loss under the $60.00 level. I am suggesting an early exit now to cut our losses early.

- Suggested Positions -
Mar 10, 2011 - entry price on ATI @ 60.78, option @ 6.40
symbol: ATI1221A70 2012 JAN $70 call - Exit @ $5.50 (-14.0%)

- or -

Mar 10, 2011 - entry price on ATI @ 60.78, option @ 10.20
symbol: ATI1319A70 2013 JAN $70 call - Exit @ $10.30 (+0.00%)

05/21/11 Exit early. ATI @ 63.78. Options @ -14% & +0.0%
04/30/11 New stop loss @ 61.90
04/30/11 Adjusted targets to $74.50 and $84.50
04/02/11 New stop loss @ 59.00

Chart of ATI:

Current Target: $74.50, and $84.50
Current Stop loss: 61.90
Play Entered on: 03/10/11
Originally listed on the Watch List: 02/05/11


Dow Chemical - DOW - close: $36.01

05/21 update: Abandon ship! The outlook for DOW has changed drastically in the last two weeks. The bullish breakout from late April has reversed. This last week saw DOW breakdown under its 50-dma and under its 100-dma. The stock looks headed for the $35-34 zone and possibly its 200-dma. I am suggesting an early exit now before we get stopped out.

- Current Positions -
May 9, 2011 - entry price on DOW @ 39.60, option @ 3.70
symbol: DOW1221A40 2012 JAN $40 call - Exit @ $1.79 (-51.6%)

- or -

May 9, 2011 - entry price on DOW @ 39.60, option @ 4.00
symbol: DOW1319A45 2013 JAN $45 call - Exit @ $2.41 (-39.7%)

05/21/11 Exit Early. DOW @ 36.01. Options @ -51.6% & -39.7%

Chart of XXX:

Current Target: $47.00, $56.00
Current Stop loss: 35.90
Play Entered on: 05/09/11
Originally listed on the Watch List: 04/30/11